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Section 201: Forms of, and procedure in relation to, certain applications

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Act 2013
Section 200 All 470 Sections of Companies Act Section 202
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Company Sec 2(20) Director Sec 2(34) Tribunal Sec 2(90)

Legal Commentary & Landmark Judgments: Section 201

Section 201 establishes the procedural conditions precedent for making applications to the Central Government under Chapter XIII, mandating public newspaper notices to members and creditors before administrative approval can be entertained.

  • Mandatory Public Newspaper Notification: Before submitting any application to the Central Government under Chapter XIII, the company must publish a general notice to members in at least one newspaper in the principal language of the district and in an English newspaper circulating in that district.
  • Mandatory Application Filing Timelines: The formal application to the Central Government (in Form MR-2) must be filed within ninety days of the general meeting approving the appointment or remuneration proposal.
  • Proof of Publication and Creditor Notice: Copies of newspaper notices must accompany the application, granting shareholders and creditors statutory opportunity to file objections directly with the Central Government/Regional Director.
  • Amended Narrowed Scope: Following the 2017 amendments, Central Government approval is largely restricted to situations where remuneration exceeds limits and bank/financial institution defaults remain uncured, or under Section 197(10) for waiver of recovery.
Key Landmark Precedents:
  • R. Rangachari v. Suppiah, (1975) 45 Comp Cas 127 (Mad): The Madras High Court ruled that publication of public notice under Section 201 is a mandatory condition precedent; non-publication or defective notices invalidate the subsequent governmental approval as ultra vires.
  • Re: Hindustan Motors Ltd., (1983) 54 Comp Cas 846 (Cal): The High Court held that the purpose of Section 201 notification is to alert the investing public and creditors to impending managerial applications, ensuring an effective right of objection before executive sanction is granted.
Courtroom Practice & Strategic Litigation Guidance:

In proceedings involving waiver of managerial recovery under Section 197(10) requiring Central Government approval, ensure that Form MR-2 is filed with certified tear-sheets of the published newspaper notices. If challenging a rival company's approval, inspect the Ministry records; failure to adhere strictly to the 90-day filing window or linguistic publication mandates vitiates the Central Government's order.

Section 200 All 470 Sections of Companies Act Section 202